Benchmarking your employee benefits will allow you to accurately gauge where your employee benefits plan stands compared with your competitors and the market. Then you can identify any gap in your desired position and develop a strategy to close that gap. Accurate and current benchmarking information is critical to diagnosing and solving current employee issues such as recruitment and retention, and also acts as a springboard for future changes.
Ways To Benchmark
One of the best ways to benchmark is to ask your broker if it’s providing any benchmarking data. Some brokers may put together an annual benefits survey that breaks the data down over industry, age and job demographics, geography and other factors. Keep in mind that your broker can’t give specifics about what certain competitors might be offering, but you can ask where the data comes from in general. Looking at trends and demographics can help you get an idea about how your benefits compare.
You can also ask your colleagues and competitors what they offer, but it’s difficult to check the accuracy of that information. Data-based benchmarking can provide more reliable insights.
When Should You Benchmark?
Companies should evaluate the competitiveness of their benefits at least once a year. Health care reform is changing the benefits landscape rapidly, so you want to make sure you are on top of what other companies are offering. Benchmarking can also help alert you to any mandates you should be following.
Which Benefits Are Considered Competitive?
While competitiveness may vary by company size and industry, health care reform has brought a new focus to health care coverage. You may find your competitors offer more plans to provide different options. Some employers pay 100 percent of health care coverage costs, while some contribute 50 percent. Benchmarking can help you find the point that keeps you competitive without overpaying.
Long-term disability insurance is also a popular choice, as many employees have a greater chance of being on disability during their working years than dying. Finally, dental insurance and wellness initiatives are popular.
What’s At Stake When Benchmarking
Benchmarking is critical to business success. Employee needs and preferences are growing more diverse and, increasingly, employees are interested in customized benefits packages. Knowing what your competitors have on tap can better position your organization in the market.
As part of your benchmarking initiative, consider providing total reward statements to your employees. Benefits are a part of compensation, but are often forgotten when employees are looking at the value they get from their employers or when job candidates are considering a job offer. Sharing benchmarking data can show employees, for example, the average amount employers in your market spend on health care and how you measure up.
Because benefits can have an effect on employee productivity, it’s crucial employers get them right. Benchmarking can help ensure that you’re offering the perfect blend of benefits to get and keep the talent you need.
Unsure if you’re offering competitive benefits? Contact us for help with your benefits packages.
HR Solutions is a human resources outsourcing firm based in Baton Rouge, Louisiana. We eliminate human resources headaches for businesses with 10 to 1,000 employees by handling their payroll, employee benefits, regulatory compliance and other staffing needs. Contact us to learn how we can streamline your company’s human resources function to save money and reduce risk.